Where’s the fraud, Mr. President?

By David Cay Johnston
December 13, 2011

By David Cay Johnston

The views expressed are his own.

A new report from London and President Barack Obama’s statements to “60 Minutes” show financial crimes spreading like wildfire and governments failing to stop them.

Tax evasion equals 18 percent of global tax collections, a new report by British accountant Richard Murphy shows. His report for the Tax Justice Network cleverly lined up a World Bank Report on the size of shadow economies with a Heritage Foundation report on average tax burdens by country to reach that figure.

Murphy’s $3 trillion estimate, 5 percent of the global economy, shows how a combination of weak rules on accounting and disclosure combined with inadequate budgets to enforce tax laws impose a terrible cost on honest taxpayers and the beneficiaries of government service.

While the United States has one of the most effective tax regimes, especially for on-the-books wage earners and pensioners, and one of the smallest underground or shadow economies, it has the largest amount of tax evasion measured in dollars.

Murphy’s report covers 145 countries that generated $61.7 trillion of gross product, 98.2 percent of the world total. The 145 countries had only 61.7 percent of world population, a reminder of how poor the more than 2.7 billion people in the other 90 countries are.

Murphy estimates U.S. tax evasion at $337.3 billion, 10.7 percent of the global figure and close enough to the official Internal Revenue Service tax gap estimates to be credible.

The United States has lower tax rates than eight of the nine other top 10 tax evasion countries. Rampant evasion in America raises doubts about the notion that high tax rates fuel evasion.

WHY NO PROSECUTIONS?

Another sort of financial crime was discussed when Steve Kroft, interviewing Obama for CBS’s “60 Minutes,” cited a poll showing that 42 percent of Americans believe Obama’s policies favor Wall Street. Kroft said he suspects that is because “there’s not been any prosecutions, criminal prosecutions, of people on Wall Street.”

Obama deftly avoided the issue. “Some of the most damaging behavior on Wall Street, in some cases, some of the least ethical behavior on Wall Street, wasn’t illegal. That’s exactly why we had to change the laws.”

Shame on Kroft for not following up with the obvious question: “Where are the prosecutions of those who did commit crimes, Mr. President?”

There is no need for new laws to rein in fraud, the evidence of which is pervasive, reported in detail by our savviest journalists, thoroughly documented in academic reports and in all manner of official government reviews.

Obama then ever so subtly shifted gears, telling Kroft “and that’s why we put in place the toughest financial reform package since FDR and the Great Depression. And that law is not yet fully implemented…”

Obama’s words neatly conflated two separate issues.

One is atrocious business judgment that should have wiped out the wealth of those who invested in the speculative derivatives casinos. That might have restored Wall Street as a home to investment houses that marshaled capital for productive investments.

The other issue is fraud.

Juries often fail to grasp arcane regulations. A crime so complex that it takes a prosecutor a day for her opening argument invites reasonable doubt. But fraud is something juries do get. Show a jury falsified records and bald-faced lies in disclosure documents, then toss in testimony from insiders who pointed out the wrongdoing only to be told to shut up — or who got fired — and convictions follow.

A GROWTH INDUSTRY

We know this because during the savings and loan crisis two decades ago juries convicted in more than three thousand cases, including more than a thousand major felony cases committed by senior insiders.

The man most responsible for those convictions was Bill Black, a federal banking regulatory lawyer at the time who now teaches about white-collar crime as a professor at the University of Missouri-Kansas City law school.

So has Obama or his Justice Department sought Black’s advice? “No,” Black told me.

Instead Obama leans on Treasury Secretary Timothy Geithner, who was worse than a sightless sheriff when he presided over the Federal Reserve in New York. Geithner not only failed to stop the looting, he actually shut down investigators who were onto the frauds because he said he worried that the institutions he was supposed to regulate were too fragile to withstand scrutiny.

The worst part of this is that the statements of the leading Republicans seeking to succeed Obama, a Democrat, make clear they have no interest in putting Wall Street criminals behind bars either.

Financial theft is a growth industry because of government failures that I would attribute to excessive reliance on the financier class for advice, campaign donations and absurdly well paid jobs for officials between their government jobs.

Will the next journalist who interviews President Obama please press the issue: where are the banking fraud prosecutions, Mr. President? And don’t let up until the president picks up the phone and tells Attorney General Eric Holder he wants a 1,000 or more major felony indictments in the next nine months.

35 comments

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Yes Mr. President, where are the prosecutions for insider trading fraud commited by the likes of John Boehner and Nancy Pelosi. The government sent Martha Stewart to jail for what these two “leaders” did.

Posted by zotdoc | Report as abusive

Prosecuting tax evaders would allow for some tax reduction for honest taxpayers. Memo to GOP: You want tax cuts? Fund the IRS and DOJ to make people pay their taxes. Then we can talk about cutting taxes for the honest taxpayers.

Posted by yrbmegr | Report as abusive

Thanks DCJ!

And Obama should be held to account on this.

If what you are saying is true, a huge portion of our national debt is attributable to both tax fraud and corporate looting of our national coffers. (no big surprise)

I will vote for Obama, without reservation. He is far better than the alternatives, but if he is the man he claims to be, stiffer laws (that all Republicons have been vehemently in opposition to) are not enough. It is time to round up those who have been allowed to prosper at the peril of our nation.

Unleash the Hounds!

Posted by NobleKin | Report as abusive

Excellent questions! Now, how do “we, the people” get our “representatives” to follow up such that the “system” functions as intended under applicable laws and regulations?

Posted by OneOfTheSheep | Report as abusive

Why do we have to wait for the President or the DOJ – where are the State AGs or sharholders who know they have been used and abused. Why aren’t they holding their CEOs and Wall Streeters to the fire and massively hauling them into court? We the people in general should have a class action law suit on Wall Street, the FED , and Congress for bailing out the fraudsters. Put all of Congress in jail and start all over with new representatives, term limits, election funding limits, and outlaw lobbyists.

Posted by JLWR | Report as abusive

What a useless graphic. Obviously the US with the biggest economy will have the largest evasion even if all of the country evasions were the same.

WHAT IS THE PERCENTAGE EVASION PER COUNTRY – only then can one make a reasonable determination.

Come on Reuters you articles are supposed to be for adults.

Posted by eleno | Report as abusive

Moreso-JLWR-’we,the people’ should want to know where the profit from investment portfolios are coming from.

Ignorance is bliss and the investing punter who wants a profit at minimum cost should do a bit of research into their own portfolios.

Posted by ex-fungi | Report as abusive

“The United States has lower tax rates than eight of the nine other top 10 tax evasion countries. Rampant evasion in America raises doubts about the notion that high tax rates fuel evasion.”

So taxation rate is lowest in the USA out of the ten, and tax evasion rate is also lowest… I don’t see how this raises doubts about the notion that high tax rates fuel evasion. If we’re going to accept the correlation alone as evidence for or against this notion; would you (or one of your readers) calculate a Spearman’s Rank Correlation Coefficient (or other Rank Correlation Coefficient) on these data sets, between taxation rate and tax evasion rate? I have a feeling that there will be a positive correlation… Am I wrong?

If you are saying that tax evasion is more complex than a simple causal relationship from tax rates alone, I would agree with that. Tax evasion rates and the size of the shadow economy must be correlated to other things too, such as:
* Strength of accounting systems, transparency culture and tax enforcement regime (both internally and across borders)
* Simplicity and enforceability of tax code (not too many loopholes – easy to identify suspicious behaviour)
* Availability of suitable tax havens with adequate means of wealth transfer with the country in question

Posted by matthewslyman | Report as abusive

Somebody would have to fund the agencies charged with enforcing the tax codes involved, but we all know which party controls the purse strings at the moment, don’t we?

Posted by borisjimbo | Report as abusive

@matthewslyman, Methinks you misread what DKG said.

You are correct in observing that the U.S. “…taxation rate is lowest in the USA out of the ten, and tax evasion rate is also lowest.

DKJ has, instead, chosen to observe that our U.S. economy is “short” by the highest amount of “diverted tax dollars” of every country charted. That should be little surprise, considering the sheer size of American GDP as compared to the others (which is not shown).

So, even at our relatively low tax rates, the total U.S. “missing” tax revenue in dollars clearly exceeds that of every other charted country. That, to me, suggests our government has more to gain by “tightening up the weave of the tax net” than governments of lower GDP and lesser “lost” tax revenue; but they obviously need to do what they can anyway.

Posted by OneOfTheSheep | Report as abusive

What the president is saying is that what they did with money, the shell game blown out of proportion, was legal. He was not saying it was right, just that it was legal, there fore laws need changing. He was not referring to tax evasion, but to Wall Street’s rough shod gambling with fake money.

Posted by Bridget0120 | Report as abusive

Communism is alive and well in Washington, D.C.!!

Posted by rrrreale | Report as abusive

Columnist here….

@ eleno, the graphic shows the evasion rate; 8.6 percent for the US, for example.

And just because the US has the largest economy does not mean it must have the largest evasion in absolute terms. Brazil, for example, has 83% the evasion of the US, yet it has only 61% the population and less than 24 percent the GDP per capita.

Posted by DavidCayJ | Report as abusive

His administration is to busy suing our States and businesses to allow unhindered access to illegal immigrants to deal with petty issues like corrupt Washington insider trading.

Posted by CountryPride | Report as abusive

@OneOfTheSheep: I care more about the proportions (the orange bars/numbers) than the raw figures (the ones in blue). If we were wringing water out of a cloth, we should not expect to be able to get the cloth completely dry with a reasonable amount of effort in wringing and squeezing. Similarly, there’s no feasible amount of tax enforcement effort that will get rid of 100% of tax evasion, or bring 100% of the economy above-board. The limits are in the proportions. There are also network effects (migration of people, migrations of ideas of tax evasion techniques and migrations of money), which indicate that proportions are more important than nominal amounts.

The data shown here have been filtered according to raw size of evasion (this is helpful in a way since it filters out micro-states that might have the more anomalous data, and less helpful comparisons when considering the case of the USA). DCJ has referenced the original study with more complete data, so I can run my desired rank correlation coefficients… DCJ focuses on Point 3 from the original article by Richard Murphy. I just made a quick scatter plot of tax burden vs. tax evasion for the countries included in this article:
http://www.slyman.org/m_politics/taxburd en_vs_taxevasion_top10bynominalevasion.p ng
(This plot will be available here for at least another 14 days)

This shows the weak-to-moderate positive correlation between tax burden and tax evasion that I was expecting to see (showing that tax evasion is at least related to tax burden, in the biggest economies). Looking at Richard Murphy’s original data, I made a similar graph by continent (using average tax burdens by continent etc.) which predictably showed a similar but weaker, less focused correlation.

In terms of the expected link between tax burden and tax evasion, most of the data points fall in the bottom-left or top-right quadrant (showing nothing surprising or extra-ordinary), but a good number of data points fall in the bottom-right quadrant (showing high taxation and low evasion) which in my view demonstrates excellent governance and enforcement. These countries are the United Kingdom, France and Germany. China is notable as having the lowest overall tax burden but its position on the graph shows moderately poor tax governance in line with Italy or Spain.

The picture I’m perceiving here is that the United States has relatively low evasion mainly by “virtue” of a relatively low tax burden, and in line with what you and DCJ are saying, the USA might gain much by better enforcement (as well as, as I have previously suggested, higher taxation).

There are plenty of interesting points in these data that DCJ does not mention. The levels of tax evasion in Spain and Italy, for example, are scandalous: comparison with the UK, France and Germany show that with better tax enforcement alone, Spain and Italy could cover most of their budget deficits! Europe, take notice!

As a continent (looking at Richard Murphy’s table under his Point 2), Africa is outstanding: they have the lowest tax burden, but almost the highest rate of tax avoidance! Is anybody surprised?

Posted by matthewslyman | Report as abusive

@matthewslyman,

If we substantially agree that “…the United States has relatively low evasion mainly by “virtue” of a relatively low tax burden, and in line with what you and DCJ are saying, the USA might gain much by better enforcement…”, why would I object to your suggestion of higher taxation?

Because it is all too easy for magicians and governments to divert Taxpayer eyes from the “walnut shell the pea is under”. Washington is the quintessential shell game.

I don’t object to higher taxation, only to higher taxation NOW. So long as citizen representatives comprising the United States Congress continue “business as usual”, i.e. believing if they spend it Taxpayers will cough up the money, these people will never turn off the phones and the cameras, sit down and begin the honest and vital process they are obligated to perform under our Constitution.

That is to separate government “wants” from government “needs” and prioritize available funds such that these are met from available funds, i.e. a “balanced budget”. At present Democrats and Republicans (and the Tea Party freshmen) perceive fundamentally different “needs”.

The Democrat list of funding considerations presumes a large and growing government and associated bureaucracy, and requires massive funding. The Republican list presumes a much leaner government and associated bureaucracy and requires much less funding. We will not know what kind of country the voters want until the next election is behind us. Only then will the appropriate direction be known and associated list compiled for due consideration.

If, as I expect, Republicans substantially prevail, there will be much wailing and screaming in the halls of Congress as many sacred cows are slaughtered. When all available funding has been prioritized “lean and mean”, I predict Congress will still be far short of “getting the end of the belt into the buckle”.

They should then seriously go after this 300 billion of tax owed but not collected. They should go after inefficiency and fraud in Medicare, MC Pt. D. and Medicaid. They should use the purchasing power of Medicare and Medicaid (as the VA does) to lower the cost of government-purchased medications from “big Pharma”. The Department of Defense and NASA must present viable goals and plans of action. Every alphabet agency should explain and defend their respective budgets in detail. Those not reasonably related to original federal government function under the Constitution should be eliminated or consolidated. Until this process is complete, NO ONE knows the financial NEEDS of our government in the long term.

Since taxpayer revenue dollars is the crack cocaine of politics on both sides of the aisle, ANY additional revenue “on the table” prematurely is like trying to put out a raging fire with gasoline. THAT’S why I don’t want to see any “higher taxation” or revenue increases of ANY SORT until the above processes are behind us.

Then, yes, by all means, as appropriate.

Posted by OneOfTheSheep | Report as abusive

Global competitors seriously challenge the US economy and the rest of the self named “developed” economies. I am not an economist but have attempted to understand some basic issues. It hasn’t helped in answering a question at the top of my mind.

How can China with 1.3 bln. people plus, seems to have very low unemployment rates, has the ability to recreate its urban stock almost overnight, seem to be able to provide low cost housing for most of its population? The housing is no frills for the most part, especially in rural areas, but the people seem to be living in houses with large amounts of space per person or per family, and can do so with an average income of about the equivalent of $25,000 USD? And the real estate of the country is now rapidly becoming privatized.

They do not have massive starvation, the seniors are not dying like flies even if there is little in the way of government provided medical insurance, and they seem to be able to quickly repair the damage caused by massive natural disasters? New Orleans, by contrast is a city that may never regain its former scale (but I will check again). On the income provided by the invading forces in Afghanistan, the city of Kabul has grown gigantically in less than ten years. A site I looked at last night stated that the city had grown form 500,000 to over 3,000,000 between 2001 and 2004. The urban area is greatly enlarged and is covered in homes and compounds that look that they are larger than the typical houses in my town.

The article and discussion about the relative size of tax evasion and shadow economies seems to be missing the even larger issue of why the US economy is measured in trillions of dollars at all? Flimsy and possibly even fraudulent IPOs like Facebook don’t argue for
the validity of US economic vitality or the numbers used to value it. The internet IPOs seem to rely on a derivative economic activity that might vanish overnight if sites like Facebook actually charged their ‘friends” for access.

The US economy is a country that seems to claim it is wealthy for being a place that builds rather cheaply constructed stick frame buildings that can occupy large amounts of land, and require extensive infrastructure to make them accessible, and can cost hundreds of thousands of dollars for houses of even modest size. And yet the Chinese can provide adequate and even rather large scale houses and apartments (take a look at Shanghai real estate listings and their asking price for new apartments or condos actually) built of far more substantial reinforced concrete and some surprisingly elegant detailing, for a tiny fraction of the US cost for the same, or even inferior, quality. The is no real equivalence actually because the building practices and techniques are very different.

This discussion about tax burdens and shadow economies sidesteps a bigger question of what makes the US economy large at all except that it seems to value itself highly and every other country seems to accept its logic, if it is actually a matter of logic at all?

To stay more on topic: why should anyone believe the rhetoric of the Republican party, or the very flimsy expectation that they will bring honestly to the budget process, congressional oversight or the regulation of Wall Street business practice when they have been dead set opposed to any regulations what so ever?

I think the federal government fully appreciates it presides over a house of cards and that any attempt to redesign the way it does business will collapse the whole double talking and illogical edifice. China has the ability to insert massive state control when they like and the USA can’t without pointless arguments about tax rates, size of government and bureaucratic growth etc. And China can teach all of it’s population how to read and their language is inherently conducive to doing mental arithmetic. This country doesn’t stand a chance of doing much of anything as it is accustomed to doing.

As OOTs said in another post, you can’t go home.

Posted by paintcan | Report as abusive

Right now the only person I will vote for president is Obama and I don’t even like him or think he is doing a good job. The problem is if a republican is in the Whitehouse with any majority in congress then the financial burden of the country will be on the working class peoples backs while the bankers and lobbyist sponsor golfing trips to the Cayman Islands for the republicans

Posted by JPWolski | Report as abusive

@paintcan,

The simple answer is that when all is said and done, China remains an authoritative dictatorship. It’s not one man, like Stalin or Mao, but the consensus of a small committee of people of similar philosophy and experience. Their process is very efficient. But you wouldn’t like living under it. When you gripe publicly, they imprison you.

You make it plain again and again that the world is incomprehensible to you on almost any level. You offer no answer, you trust no one, you see no path to improvement.

I ask, then, WHY DO YOU POST? I know, “It’s a hobby”.

Posted by OneOfTheSheep | Report as abusive

I have not said it is incomprehensible. Only that it’s rhetoric is always mostly double talk. Especially yours.

China is not exactly a dictatorship. They are really more like the one party system that defines quasi-religious systems like those of the Middle East monarchies or outright religious systems like the Papacy. The appearance of authoritarian rule is a ruse in some ways and masks the extreme points of disagreements within the party. Their president is really a summation of a moving national consensus and is the modern result of an age-old system of government by almost untouchable authority and the result of the gross inequalities of income and education that typified the society before the communist system took control. It is taking them time to get off their knees, to unbend and to become more sophisticated and perhaps less comfortably “happy” or in agreement.

In fact, many people seem to want a presidential or one party dictatorship and authoritarian regime here. I know people who think it already is. You are one, I suspect who would live in an authoritarian regime as long as you can keep you green acres and fruit trees. Your opinions are always expressed as verities and the voice of moral authority. I think the future political pressure here is to create a new political authoritarian government. The futility of OWS is a symptom of how truly inert the system now is to popular influence and those being squeezed out or trapped in high costs and low returns.

I post because my comments seldom get much complaint, except when they are grossly inaccurate as to facts. People in China could gripe all they like someday and it won’t make a great deal of difference in the way the machine of state grinds along because they have a very full load. Their system was and is very vulnerable to popular hysteria and fits of popular rage. I suspect the same is true here or could become more so. This country may not like to recognize that fact. In is unavoidable that population pressure will make the state far more important and will force, has always forced, even the most powerful individuals to kneel before public necessity. I write because that future necessity is still something largely undefined and nerve wrenchingly exhausting to figure out.

The fact that you can say that people like me would be imprisoned for my “gripes” tells me that a government in the hands of people like you would be very inclined to imprison people like me for our verbal conundrums because you find them too uncomfortable to consider. I doubt many would have agreed that what I say is actionable or libelous or even true. I can easily be dismissed as a nut job, crank or someone with “racing thoughts”. But I’m having an awful lot of fun writing them even if they might be verbal diarrhea sometimes. I wouldn’t mind soiling some smug upholstery (but my personal upholstery I are my fruit tress actually)..

You like your emotional and intellectual cozy places and smug certainties and can never conceal your hostility to the inconvenient eccentric or out of place. Have you even visited the Museum of Modern Art or any museums for that matter? I can’t claim I’m at their level all the time and am not even sure I ever reached it, but visits there tend to get my goat too and always leave with a sense that I only thought I knew what I thought I knew.

I’d tuck my tail in and do something else with my time if far more people spat on me. You can be sure of that. But I love picking on you because I understand your points far more than many of the others. Merde, now I have to leave you alone.

Posted by paintcan | Report as abusive

@OneOfTheSheep: I would normally agree wholeheartedly with your suggestion that spending needs to be comprehensively reviewed prior to increasing taxes. Only, taxes have recently been substantially reduced, partly on a temporary and partly a permanent basis. The USA is taxing at 15% of GDP, and spending at 25% of GDP. U.S. national debt is about 100% of annual GDP (near the proven danger level that starts to affect GDP in itself.) In other words, unless the U.S. government increases taxes now, in spite of the recession that has been deepening despite all the previous tax cuts (at least, by restoring the previous tax regime, trimming obvious non-essentials and freezing budgets RIGHT NOW), the U.S. is going to bleed to death economically. The USA is working itself into a corner where the only possible outcome within the next 5 years will be a shock devaluation in the USD, and a substantial loss of U.S. economic pre-eminence in the world. I don’t want that to happen. It’s time to increase taxes, right now, starting with those who can pay; and high time to use that “increase” in taxes (or, that reversed reduction if you will have it) to support people back into productive work.

@paintcan, excellent comments on China.

@OneOfTheSheep, your criticism of “paintcan” reminds me of Harper Lee’s “To Kill a Mockingbird” – the scene in the school where American school-children are being asked by their teacher to recite,
“Germany is a DICTATORSHIP. America is a DEMOCRACY…”
Practically every country in the world uses (to some extent) propaganda to convince their people they are living in the best country on Earth – they do this (and other things) to prevent social unrest and prevent demographic problems from arising through mass migration.

Posted by matthewslyman | Report as abusive

Great piece, and right on the money.

But we need a solution here in the US, and with understaffed and, I dare say, inept IRS and DOJ personnel, we need to involve the private sector through the IRS whistleblower program championed by Senator Grassley (Rep). Properly incentivized and protected whistleblowers is the surest way to remedying this dire situation where ordinary workers pay the taxes of high earners.

http://www.irs.gov/compliance/article/0,  ,id=180171,00.html

The IRS whistleblower program has the distinct advantage that solid cases are subjected to many eyeballs, meaning they are much more difficult to brush under the carpet.

Posted by Dobe | Report as abusive

David, this is a poor excuse for journalism. Did you even read through the Tax Justice Network report? It shows the U.S. with the very smallest shadow economy, as a percentage of GDP, in the entire world, barring only Sweden (which was at 8.6%, versus 8.7% for the U.S.). We have more “tax lost” by their computation only because our economy is about 3 times as large as the next biggest economies in the world (China and Japan). There is no honest way to equate this, as you do, with “financial crimes spreading like wildfire” and “[r]ampant evasion in America.”

Posted by Matt0001 | Report as abusive

We have the second lowest evasion rate in the world, per the study. That strongly supports the intuitive argument that lower taxes reduce incentives to funnel economic activity into the shadow activity.

Posted by jpe12 | Report as abusive

Lower taxes don’t reduce the tendency to divert economic activity to shadow economies as much as a very strong – even abusive – income tax enforcement mechanism.

Income tax may not be the primary way many other countries raise money. France considered the payment of income taxes something you did on the honor system, more or less. So I heard years ago. I don’t know if that’s changed?

I remember decades of horror stories about what the IRS did to tax cheats. Terrorism – even legal terrorism – tends to rule hearts and minds.

But feduciary responsibility – and CEO’s have that responsibility, may not matter that much to them now? Or is it possible these CEO’s don’t actually know how to perform their jobs after all or they are too complex?

Or perhaps they all appreciate that a country can only have as much law enforcement as it can afford. Law and order only tends to impress the popular mind as cops on the street. But the bigger and murkier crimes they can’t see, they don’t tend to care as much about and don’t tend to get as much notice. There is always a strong element of showtime and propaganda in the highly publicized crimes.

I don’t know why so many people – self-proclaimed populists – are so willing to play into the hands of a very gilded elite? They are the class of people quite capable of relegating a great mass of the population to the level of household furniture and expendable products.

Posted by paintcan | Report as abusive

@Matthewslyman,

You have allowed your attention to be distracted from that is of most importance to that of lesser importance. NO party and NO INDIVIDUAL is going to SERIOUSLY mount and maintain the effort necessary to CHANGE THE CULTURE of Washington and balance the budget by reducing spending AND auditing present spending recipients and amounts without the extreme financial pressure of yet ANOTHER spending limit broach (which, fiscally, is another symptom of fiscal lack of will and failure) and an ever-increasing deficit.

It would be folly to reduce the sense of urgency absolutely essential to initiate such fundamental change. Increasing tax revenue in ANY manner at present without prior reductions and the establishment of meaningful spending priorities by Congress is to apply a bandage to an open hemorrhaging wound. Just as bandages and plasma are scarce and valuable resources on the battlefield, it is equally important to perceive that this country has been in a battle for it’s financial heart and soul for some time and it’s very survival as an economic engine for good in the world is seriously in question.

To “transfuse more plasma” (increase tax revenue) before reducing the rate of hemorrhage essentially squanders a necessary healing effect. If the existing financial pressure is thus reduced, the likely result would be the indefinite extension of a status quo substantially agreed to be unsustainable. That, to me, would be irresponsible to the point of stupidity.

All of the things that so alarm you (and me) have been going on for years. The U.S. is NOT going to “bleed to death” between now and the next election. With the financial health of the Euro and Europe itself on life support for the indefinite future, the U.S. dollar remains, however badly abused by it’s government, a more practical basis for commerce than gold.

The U.S. government needs major surgery that has NEVER BEEN DONE BEFORE and that no one has experience doing. This is NOT a task to be rushed, but one to be carefully planned and executed to achieve specific goals. It something we best do RIGHT rather than QUICK. Understand that you are, at best, an observer overseas with an incomplete frame of reference and a desire for a “safe” way to proceed. For an undertaking such as this, there is no “safe” way to proceed.

The Obama administration has been an utter failure in finding and funding “shovel-ready projects” to reverse the deteoriation of U.S. infrastructure. We need a WPA or CCC type effort to hire, organize and utilize the unemployed at minimum wage on a massive scale much in the same way that the U.S. trained pilots, navigators, bombadiers, navigators, mechanics, gunners, etc. in WW II in a short time.

The union pork of Davis-Bacon on federal projects is a political luxury never justified that “we, the people”, can no longer afford. Far, far better to spend federal money to do that which needs to be done than continue to pay “benefits” to able-bodied people to sit home, watch TV and visit Walmart.

It was once “standard procedure” in American classrooms for children to recite that which a teacher wanted them to LEARN. The fact that people who think as paintcan thinks could go through our educational system FIVE YEARS beyond high school and still claim not to be able to recognize “truths” is evidence of an epic fail to create and sustain the informed electorate upon which our republic, past, present and future, depends.

There is a difference between propaganda and truth. The European belief that socialism is a viable concept of government has arisen from propaganda. Truth is that socialism can not sustain the spark of incentive each of us is born with as the American hybrid of capitalism does. The unsustainability of the socialist government “model” is ever-increasingly obvious in adverse financial times. That system must evolve or be replaced.

While the disease of unsustainabilty also infects America, it is less serious. There is no alternate superior economic system to consider as an alternative to the American hybrid of capitalism. NONE! The overall and continuing success of the American “model” for almost two centuries is not “propaganda”, as you infer, and to which inference I take specific offense.

The “economic miracle” that is America is real. That is why virtually every person capable of relocating to America “votes with their feet” not only to do so, but to stay once here (illegal immigrants obviously excepted). The opportunity here is not uniform or perfect, but it is no illusion. America is and will remain the “best country on Earth” for those who value opportunity over unearned leisure and security.

Our “cards” have long been “on the table” for all to see. They are the “winning hand”. Those living elsewhere can only read ‘em and weep!

Posted by OneOfTheSheep | Report as abusive

Crime on Wall Street? There’s no crime on Wall Street. We’re just misunderstood. If the 99% would get off their backsides and go get an MBA from an elite business school, like we did, they’d understand.

We explain how it works in simple terms here: http://www.WeWereWallStreet.com/About-Us .html

Go after the real crooks, like food-stamp fraudsters, and leave us alone. We’re working to increase your trickle-down share. That’s good for society. See? It all evens out in the long run.

Posted by WeWereWallSt | Report as abusive

You missed the entire point. Tax evasion in the US is done by lobbying for loopholes, not fiddling the books. And it is huge compared to other countries which haven’t stumbled onto this approach.

Posted by Tou | Report as abusive

Unremarkably enough, certain members of Congress are balking at making themselves subject to insider trading bans. As to “where’s the prosecution”, this story is outdated as of today.

Posted by borisjimbo | Report as abusive

OOTS writes – The “economic miracle” that is America is real. That is why virtually every person capable of relocating to America “votes with their feet” not only to do so, but to stay once here (illegal immigrants obviously excepted). The opportunity here is not uniform or perfect, but it is no illusion. America is and will remain the “best country on Earth” for those who value opportunity over unearned leisure and security.

You’re out of it. You do believe the propaganda. It’s very beautiful propaganda to be sure. But actually, as my Brazilian friend has been educating me over the years, Europeans, Africans, the Chinese, SE Asians, were relocating to every country on earth that would have them. They didn’t move away from the very stratified economies of Europe to breath free but to breathe at all. The planet is flooded with “illegal” and legal immigrants and migrant workers and they all get the same suspicion and resentment wherever they are. And any place they can survive and possibly thrive, is their golden bowl. And many countries treat them even more harshly. The “socialists” or “liberals” tend to be the people who complain the most when that abuse becomes most obvious.

And name one political, economic or even religious truth on the face of the earth that hasn’t been and can’t still be sneered at or hasn’t been shot through with special exceptions and yards of bookshelf space of discussion about it’s benefits and inadequacies? Try to name one? The truth you see so plainly may not be able to stand the scorching light of day?

For a staunch believer in do-it-by your own bootstraps, you are actually saying that you want the government to come to your rescue with massive government work programs like the CCC and WPA. Keep talking, your contradictions are showing. Where’s the truth?

And if at anytime while you were working selling hospital facilities to the Shah, you also made some under the table payoffs to get the contract, than your “hard earned efforts” take on a very different meaning.

If my education is lacking, it’s because in some ways education can’t keep pace with the new world disorder. They are out of breath and “they can’t go home”. I went to HS and college during the Vietnam War era. That was not a time conducive to the government line, to a single and domineering point of view and it certainly isn’t conducive to concentration. The Chinese had it worse. They had the Cultural Revolution. Those people couldn’t tell one year to the next what was approved or disapproved by the official line.

Posted by paintcan | Report as abusive

Paintcan,

You acknowledge you “…can easily be dismissed as a nut job, crank or someone with “racing thoughts”…even if they might be verbal diarrhea sometimes.” When this is apparent in your posts, I choose to substantially ignore them as harmless.

My goal in posting is to spread awareness of those “truths” and concepts that should be self-evident to those of intelligence and open mind. Where I see no self-evident “truth”, I share my personal opinion, trying to make the difference apparent. I’m sure YOU see NO difference. I’m OK, you’re OK.

You say I “like” my “…emotional and intellectual cozy places and…certainties…”. You’re quite right. Who, over the years, would not seek the intellectual consistency from which “comfort in one’s own skin” evolves? Who, having achieved such, would not thus dwell?

I can have sympathy for those whose life has been such that they are “emotionally and intellectually homeless”, and whose unconcealed envy must dismiss the success of others as “propaganda”. The decidedly working class families on both sides from which I came had substantial and numerous challenges in the 20th Century.

Out of eight emerged one graduate engineer, two professors (one each MBA and PHD), a railroad engineer, a teacher (with MBA), a waitress/hostess, a postman, and an oil company Vice-President. This record is not propaganda, it is real.

Of the bunch, only one do I accept as successful; i.e. content, upbeat and non-judgmental. Financially, he was only marginally successful; but he was my choice of a role model in my youth to achieve satisfaction and day-to-day happiness.

I genuinely wish ALL the opportunity to enjoy these things, but it is for each to define and achieve them in their own way. The path is different for each as are the challenges that will be encountered.

Happiness is not something to be checked off on one’s “bucket list”, but a way of living by choice necessary every day. As life unfolds amid chaos and uncertainty, it is those who still manage to concentrate and function that will sail the most straight and steady course possible toward their personal goal.

Every “political, economic or even religious concept any individual “sees and accepts” as a “personal truth” is just that. Personal. Unique in relation to what they are or would be.

Each has or can be sneered at by others. Doesn’t make them any less worthwhile, any more than a rat nibbling at my doughnut makes it any less nutritious other than as I pinch off that which I suspect contaminated.

I need NO ONE to “come to my rescue” at present or in any reasonably foreseeable future. I propose consideration of diverting funds presently expending to extend unemployment “benefits” and union pay scales in government works project to get more done in the manner of the CCC and WPA.

Even as wasteful spending “props up” America’s current and unsustainable financial “house of cards”; I believe that same money could achieve more in terms of results and incentive. That is why I put forth those suggestions.

While I have never made “…under the table payoffs…” of any kind anywhere at any time, that is not to say I would not. “When in Rome, do as the Romans do”. America does not have the luxury of following “Marquis of Queenbury Rules” if it is to effectively compete on a World stage.

There are places where bribes and payoffs are part of life if one is to do business there. Iran was such a place. Where there is the opportunity of a worthwhile and honest profit to be earned, to abandon such profit to those of lesser ethics is to cut one’s own nose off to spite one’s own face.

Even idealists who travel abroad to “help the poor” must be ever aware so as not to return with fleas and/or bedbugs.

Posted by OneOfTheSheep | Report as abusive

Now that I know that bribes and payoffs are part of the way you do business, than I feel more than justified in being cynical. I knew things weren’t quite adding up in my experience. The rest of your comments are the same self-inflating and self-serving rationals you still cling to as “truth”.

“I’m OK you’re OK”. Still no more consistent than usual. Where did that come form?

You had a big and successful family and yet you have wanted all those who can’t meet your standards to practice family size limitation, if they can’t pay the bills. You think there are enough of you to fill the planet and in fact, would prefer that you did? And you will bride to make sure you get a better position. That is illegal in a way I find a lot more objectionable than hitting my pipe. I may blight myself, but you would blight whole countries. You would buy a lifeboat on a sinking ship.

But I would rather die than pay a bribe or take one. Someone once tried slipping me a sealed envelope and I told him to get out of my house. I never understood how he got involved with a question of charitable, or at least, “at cost of materials” project I was asked to undertake for a man I had never set eyes on. After bribery comes blackmail and extortion. A friend of mine suggested that he might have also taken a finders fee for his fund raising endeavor. No wonder you keep guns to guard your “accomplishments”. One has to be on one’s guard with such aggressive and sneaky purveyors of “the Truth”. I have learned not to trust people who smile too much.

The waitress was the least aggressive and the most honest of the lot of you, The poor woman is helpless. Unless she steels from the tips?

We aren’t in Rome. They didn’t have much of a Constitution and suffered under a notoriously corrupt legal and political system. I love to visit them in the books but I wouldn’t want to live there.

If frequency of comments is a sign of mental incapacity or lunacy, you may be in the next rubber room over? Or haven’t you noticed?

Posted by paintcan | Report as abusive

@paintcan,

Sorry, visiting time is over. Hope you get better.

Posted by OneOfTheSheep | Report as abusive

@OOTS – Hope you do to. Merry Christmas.

Come to think of it – Kids do learn a little about how to bribe Santa Claus with cookies.

And I always thought they were just being polite and showing a little gratitude.

But I never left Santa anything and I got what I wanted anyway. I knew he was always Mom and Dad because you tell by the expression of their faces. They always think the kinds are dumber than we act.

Posted by paintcan | Report as abusive

The fraud has been perpetrated by our illustrious congress. It’s an outrage that the Congress has permitted this to happen. They need to be thrown out and the voters need to pay at least some attention to what they’ve been doing all these years….that is except for feathering their own nests.

Posted by palmer1619 | Report as abusive